With a a stronger economy, increased consumer confidence and overall growing demand from consumers, the restaurant industry is expected to hit a record high of $683 billion in sales by the end of this year, representing the fifth consecutive year of real growth in restaurant sales. For restaurant owners who are contemplating ways to differentiate themselves and increase revenue, now might be the perfect time to renovate your space.
There are a number reasons to renovate an restaurant, but in general, redesigning your establishment can spruce up its image and attract more clients, benefiting both the owner and the customers. However, it is common knowledge that restaurant renovations can cost a pretty penny; which is why it is recommended to have a strategy in place that can guide you throughout the whole renovation process.
1. Timing is everything
Don’t wait until it looks like it’s time to remodel. Knowing ahead of time what work needs to be done can help you not only to be better prepared, but also keep your initial budget forecast in check. To stay ahead of the curve, some restaurant professionals recommend a facelift every 5 to 7 years.
2. Define your target market / demographics
When deciding on a final design, you have to know what type of clientele you want to attract. But before you do that, we recommend you analyze and examine the demographic trends in your local area, which might reveal a change in the population’s average age, employment status or disposable income; all of which would help you better target your customers.
For example, you might opt for a more modern / casual design if you notice a growing number of trendy young professionals moving into your neighborhood. In addition to that, study your competition and ask your customers about their feedback on what would make your restaurant more appealing.
3. Check your lease terms
Before starting any renovation work, you will most likely have to discuss your plans with your landlord. Many landlords might argue that you as the restaurant owner, should be responsible for the renovation cost; While others might foot part or even the entire bill, since technically, it is their building you are renovating.
4. Get the proper financing for your project
As we mentionned before, renovations can cost a small fortune, which is why most restaurants look for outside financing to complete the project. Traditionally, restaurant owners have turned to banks for a business loan, which is usually a very lengthy process. Alas, banks want to make sure there is adequate cash flow to repay a loan and often reject these financing applications for a variety of reasons, be it due to the lack of collateral, or because the restaurant has not been around long enough.
Read more: Small Business Financing for Restaurants
Fortunately, restaurant owners and managers can look for alternative sources of financing, even if they have been turned down by a bank. Free services like Fundivo offer a side-by-side comparison of lenders and small business loans with no credit check being required. In addition, as opposed to a bank’s long process which can take months, by using alternative sources of financing, restaurants can be approved in minutes and receive funding in as little as 24 hours.
5. Choose the right contractor
Before you choose a contractor for your renovation project, you have to be convinced in their ability to deliver the project as you envisioned it:
- Shop around and look for reviews, which sometimes can be found online
- Take past quality and on-time performance into consideration
- Ask for examples of similar projects they have worked on
- Request references from firms they have worked with in the past
6. Plan your schedule accordingly
You need to decide whether you can maintain your restaurant open during renovation or if you need to shut down for a period of time. Shutting down completely obviously has a negative impact on your financial situation since your restaurant will not be generating revenues during the construction period. Also, in many cases renovation works require obtaining the appropriate permits, so you need to take that into consideration and be prepared for it, that way you can minimize the down-time and get your business back up and running as soon as possible.
7. Let the world know
The whole point of renovating your restaurant is to attract more clients. As such, it is highly recommended you run a promotional campaign that makes the new space its focal point and raves about how it stands to benefit your clients. One idea is to throw a big “Grand Re-opening” or food tasting event, which you can advertise both offline by handing out flyers, or online using social media.